MODELLING THE DEMAND FOR HEALTH CARE GIVEN INSURANCE: NOTES FOR RESEARCHERS

Abstract

Understanding on health care demand given insurance gives
precious information to anticipate health care costs in the future,
which in turn provides valuable information for policy makers,
among other, to estimate claim rate, set up premium, design
cost-sharing policy, etc. Unfortunately, estimating the effects
of health insurance on health care demand is not straight
forward. This paper identifies crucial factors (e.g., adverse
selection and provider behaviour) that need to be considered
in estimating the effects of health insurance on health care
demand. These considerations persuade researchers to use
a rigorous econometric model in estimating health care demand
given insurance with a view to isolate the true effects of
health insurance program. Such considerations can be further
classified into two-main factors. First is the features of the
dependent variables used to measure the demand, and second
is the source of the data (or study design) used in the analysis.
Keywords: modelling, health insurance, demand healthcare
services, applied econometrics